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    Charisma Company Required 1 Date Interest Received Interest Income Discount Amortization Carrying Amount

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    Anonn
    Charisma Company purchased $1,900,500 in bonds on January 1st, 2020 that mature on December 31st, 2022 and pay annual interest of $160,000. Over the 3 year holding period, the carrying amount of the bonds increased from $1,900,500 to $2,000,000 due to recognition of interest income and amortization of the purchase discount. The journal entries recorded the cash receipts of annual interest payments as well as the amortization of the purchase discount through increases to the carrying amount of the investment in bonds.

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    Charisma Company Required 1 Date Interest Received Interest Income Discount Amortization Carrying Amount

    Uploaded by

    Anonn
    335 views2 pages
    Charisma Company purchased $1,900,500 in bonds on January 1st, 2020 that mature on December 31st, 2022 and pay annual interest of $160,000. Over the 3 year holding period, the carrying amount of the bonds increased from $1,900,500 to $2,000,000 due to recognition of interest income and amortization of the purchase discount. The journal entries recorded the cash receipts of annual interest payments as well as the amortization of the purchase discount through increases to the carrying amount of the investment in bonds.

    Original Description:

    Intermediate Accounting1

    Original Title

    20-1

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    Charisma Company purchased $1,900,500 in bonds on January 1st, 2020 that mature on December 31st, 2022 and pay annual interest of $160,000. Over the 3 year holding period, the carrying amount of the bonds increased from $1,900,500 to $2,000,000 due to recognition of interest income and amortization of the purchase discount. The journal entries recorded the cash receipts of annual interest payments as well as the amortization of the purchase discount through increases to the carrying amount of the investment in bonds.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    335 views2 pages

    Charisma Company Required 1 Date Interest Received Interest Income Discount Amortization Carrying Amount

    Uploaded by

    Anonn
    Charisma Company purchased $1,900,500 in bonds on January 1st, 2020 that mature on December 31st, 2022 and pay annual interest of $160,000. Over the 3 year holding period, the carrying amount of the bonds increased from $1,900,500 to $2,000,000 due to recognition of interest income and amortization of the purchase discount. The journal entries recorded the cash receipts of annual interest payments as well as the amortization of the purchase discount through increases to the carrying amount of the investment in bonds.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 2

    Charisma Company

    Required 1

    Date Interest received Interest income Discount amortization Carrying amount


    1/1/2020
    12/31/2020 160,000 190,050 30,050
    12/31/2021 160,000 193,055 33,055
    12/31/2022 160,000 196,395 36,395

    14pts
    Required 2 Debit Credit
    2020
    Carrying amount Jan-01 Investments in bonds 1,900,500
    1,900,500 Cash 1.900,500
    1,930,550
    1,963,605 Dec-31 Interest income 160,000
    2,000,000 Cash 160,000

    31 Investment in bonds 30,050


    Interest income 30,050

    2021
    Dec-31 Cash 160,000
    Interest income 160,000

    31 Investment in bonds 33,055


    Interest income 33,055

    2022
    Dec-31 Cash 160,000
    Interest income 160,000

    31 Investment in bonds 36,395


    Interest income 36,395

    31 Cash 2,000,000
    Investment in bonds 2,000,000

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